court of appeals refuses to create right of publicity for houses, over dissent

Dihno v. Netflix, Inc., 2025 WL 3280834, B335652 (Cal. Ct. App. Nov. 25, 2025)

Over a partial dissent, the court of appeals affirms the rejection of various claims, including CLRA and FAL claims, against Netflix based on its use of a photo of plaintiffs’ house in an ad for Buying Beverly Hills, one of its reality shows, which depicts the operations of a real estate firm. “Plaintiffs’ home is on a ridgeline in the Hollywood Hills. The property is guarded by a private gate and the home is not visible from any nearby street. The closest publicly accessible vantage point from which the home can be seen is 1,034 feet away.” The photo was taken by a nonparty and published on Shutterstock, then licensed for the ad. The photographer “allegedly took the photo without Dihno’s knowledge or consent using a drone or other specialized photography equipment. The photo depicted interior and exterior details of the home not visible from any public location, including the ‘room layout’ and the entrances and exits. The original photo allegedly depicted plaintiffs’ silhouettes, but was cropped to remove them for the ad. As alleged, both Netflix and its ad agency knew that the home was not associated with or depicted in Buying Beverly Hills.

People allegedly began to visit plaintiffs’ home “on a daily basis” asking to see it and claiming they learned it was for sale through the Buying Beverly Hills advertisement, including a woman who demanded to enter, refused to leave, and was arrested. “Other people attempted to open plaintiffs’ front gate and climb over their fence.” Plaintiffs received calls “more than once daily” from real estate agents who sought to represent the family in selling the home. (OMG! Me too!) This caused plaintiffs harm to their mental health, reputations, and relationships with neighbors. They spent approximately $20,000 on security measures.

Plaintiffs sued for: (1) invasion of privacy, based on theories that Netflix intruded upon plaintiffs’ seclusion and portrayed them in a false light; (2) negligent infliction of emotional distress (NIED); (3) intentional infliction of emotional distress (IIED); (4) Consumer Legal Remedies Act (CLRA) violations; and (5) violation of the California False Advertising Law (FAL).

Invasion of privacy: Right of seclusion: This requires that a defendant must intentionally intrude into a place, conversation, or matter as to which the plaintiff has a reasonable expectation of privacy, and the intrusion must occur in a manner highly offensive to a reasonable person.” The state constitutional cause of action for invasion of privacy has “largely parallel” elements.

Netflix didn’t do the intruding; the question was whether it “ratified” the intrusion when it published the ad. “Ratification is the voluntary election by a person to adopt in some manner as his own an act which was purportedly done on his behalf by another person, the effect of which, as to some or all persons, is to treat the act as if originally authorized by him.” But there were no allegations that the photographer acted on Netflix’s behalf. Indeed, the photo was on Shutterstock, from which any member of the public could license the photo, contradicting any argument that the photographer acted for Netflix. Moreover, “[r]atification can only occur where the person ratifying has full knowledge of the facts.” Netflix was not alleged to have knowledge. 

What about the people who intruded, allegedly caused by Netflix? Intentional intrusion doesn’t cover third party intrusions except when vicarious liability is possible—that is, when the intruders are defendant’s employees. Although an ad soliciting people to come to another’s home for sex and providing the address might show an intent for third parties to harass the plaintiff, that’s not what happened here.

False light: This requires a portrayal that would be “highly offensive to a reasonable person, and where the defendant knew or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the plaintiff would be placed.” “Yet, on its face, the advertisement depicted a home, not the plaintiffs; and it included no personal information from which any viewer could identify them.” Even if third party real estate agents somehow associated them with the show, “the complaint does not allege, and plaintiffs fail to explain, how association with a television show involving real estate is highly offensive to a reasonable person. As a matter of law, we conclude it is not.” Although they alleged that the ad publicly disclosed the entrances, pathways, and floor layout of their home, there was no allegation of falsity.

Statutory invasion of privacy: Plaintiffs invoked a California law providing that any person who enters “the airspace above the land of another person ... in order to capture any type of visual image ... of the plaintiff engaging in a private, personal, or familial activity and the invasion occurs in a manner that is offensive to a reasonable person” is liable for physical invasion of privacy. But there were no specific factual allegations that could support this statutory claim with respect to offensiveness.

CLRA and FAL: No standing. Standing requires economic injury or damage which “ ‘was the result of, i.e. caused by,’ ” the CLRA or FAL violation. For causation, plaintiffs must demonstrate that they “ ‘ “actual[ly] reli[ed]” ’ on the ‘ “allegedly deceptive or misleading statements” ’ and that it ‘ “was an immediate cause” ’ ” of their injuries. But plaintiffs didn’t allege reliance, only harm from alleged perceived affiliation with Buying Beverly Hills.

Plaintiffs argued that reliance was unnecessary because their CLRA and FAL claims do not sound in fraud, but they obviously were. Plus, CLRA remedies are available only to a “consumer,” meaning “an individual who seeks or acquires, by purchase or lease, any goods or services ....” Although plaintiffs alleged that they purchased goods generally, “we disagree that the CLRA can be interpreted to permit any person who purchases goods to seek relief from any entity that publishes misleading advertisements.”

NIED: “[A]s a general matter, there is no duty to act to protect others from the conduct of third parties.” There were no allegations that plaintiffs had a special relationship with Netflix, and under the facts alleged, Netflix did not affirmatively create any peril. The ad didn’t encourage third parties to visit the home, trespass on the property, or harass the homeowners. It didn’t even disclose plaintiffs’ address, “nor any street or landmark from which the home’s location could be feasibly discerned.” Moreover, the complaint alleged, plaintiffs’ home “is not even located in Beverly Hills,” meaning that anyone searching for the home in the television show’s namesake city would be looking in the wrong place.

IIED: Netflix allegedly posted the ad on its own home page and on other unspecified websites and publications. The complaint didn’t allege that plaintiffs themselves were Netflix subscribers, nor that they were the target of any form of the ad, nor that Netflix intended to encourage third parties to visit.

IIED typically requires conduct directed at the plaintiff, but there’s an exception “when the defendant is aware, but acts with reckless disregard of the plaintiff and the probability that [its] conduct will cause severe emotional distress to that plaintiff.” This exception applies only when the defendant’s conduct “was done with knowledge of [plaintiffs’] presence and of a substantial certainty that they would suffer severe emotional injury.” The complaint didn’t and couldn’t plausibly allege that.

Private nuisance also failed for similar reasons.  

A concurrence defended the majority’s reluctance to expand the intentional tort of intrusion “in a sweeping and unwarranted way”:

In search of a legal theory, appellants contend they “should have some right under the law to limit Netflix’s exploitation of their home, life, and privacy.” Appellants’ claim that Netflix “exploit[ed]” “their home” sounds suspiciously like a proposed right of publicity for houses. For good reason, there is no such tort.

 Given the causal chain alleged, liability under this new theory would be

breathtaking in its scope. Let’s say the Los Angeles Times decides to do a piece on “five houses in Los Angeles that look like they came out of a fairy tale.” You know—with those cute, curving brown roofs. People read the piece and think, “Wow, I’d like to see that.” They drive by, or walk by, the houses. Maybe some even knock and ask to come inside. Let’s say lots of people do that. Let’s say the “publisher” of the piece is not the Los Angeles Times but an influencer on Instagram who’s interested in architecture. Can the owners or residents of those homes sue for intrusion? One can imagine myriad other examples. And—according to appellants—someone who merely licenses a photograph from a stock footage agency and publishes it can be socked with a lawsuit as well if people show up to check out the house in the photo.

Nor were ads without constitutional protection.

Judge Edmon partially dissented, arguing that there should be an intrusion claim here, relying on the flexibility and expansiveness of the privacy torts. “[A]t least a few cases have recognized claims for intrusion where defendants published information about the plaintiffs that caused third parties to intrude into their private spaces.” Unsurprisingly, these are cases when harassers published solicitations claiming that women wanted sex and third parties showed up in reliance on the false claims. But the dissent would generalize to “defendants’ publication of information that created interest in the plaintiffs and led to foreseeable physical intrusions by third parties that significantly disturbed the plaintiffs’ solitude.” That’s not foreseeability—that’s deception and intent to harass. But the dissent would not require intent to harm, only intent to intrude. [I’m still not seeing intent to intrude here.] And it didn’t matter that Netflix didn’t publish an address or names, because, in a previous case, the ad used the woman’s name but not her address and the third parties were able to find her address by using the phone directory. Because “many third parties allegedly were readily able to discover [the address here], presumably by using widely available Internet or artificial intelligence tools, “I therefore would leave it to the trier of fact to decide whether Netflix’s use of the photograph of plaintiffs’ home in its advertising, even without an accompanying address, was sufficiently offensive to create liability for intrusion.” And subsequent publication can matter to whether an intrusion is particularly invasive.

Plaintiffs do not suggest—and I would not conclude—that simply taking a photograph of the outside of plaintiffs’ house was an actionable invasion of privacy. But that is not all plaintiffs allege. They allege that the photograph was broadcast to hundreds of millions of viewers in connection with a television series about the sale of upscale real estate to the rich and famous. In an era of obsessive interest in fancy homes and fancy people—coupled with Internet tools that make it a simple matter to link an image of a property to an address—I believe a reasonable trier of fact could, in appropriate circumstances, conclude that Netflix’s advertisement gave rise to a cause of action for intrusion.

Because this was an ad, there were lesser constitutional concerns than with other applications of the privacy torts.

As for the anti-drone photography statute, the dissent would still have rejected the claim, albeit for a different reason: the dissent accepted the allegations that the drone must have flown too close because it “captured exterior and interior details of the house that that are not visible from any public location,” which could be “offensive to a reasonable person” within in the meaning of the law. Nonetheless, there was no “visual image, sound recording, or other physical impression of the plaintiff engaging in a private, personal, or familial activity,” as further required by the statute.

The dissent would also have found private nuisance properly alleged.

 

once again, injury requirement defeats a false advertising claimant

Skillz Platform Inc. v. Papaya Gaming, Ltd., 2025 WL 3268799, 24cv1646(DLC) (S.D.N.Y. Nov. 21, 2025)

Previously. Here, Skillz successfully kicks out Papaya’s false advertising counterclaims for lack of injury, showing once again that the statutory presumption of irreparable injury is really, really helpful when the elements of likely success on the merits don’t include injury (trademark) and much less helpful when they do (false advertising).

The parties compete in the real-money skill-based mobile gaming (“RMSB”) market. RMSB platforms match players with other users on games created by third parties and compete to win cash prizes or for game rewards. Skillz most commonly offers head-to-head competition between two players, while Papaya offers multi-player tournaments with larger cash prizes.

Papaya argued that several of Skillz’s claims were false: Skillz advertises “Match with REAL PLAYERS of equal skill,” and its website stated that it “leverages player matching technology to ensure fairness by pairing players of equal skill levels, so beginners only play beginners and experts only play experts.” However, Skillz does not dispute that matchmaking on its platform has included “skill band expansion.” That is, “[a]s the time increases from when a game is initiated, the maximum player rating differential permitted for a competitor to be matched with the initiating player also increases.” It also made other adjustments in matching that arguably don’t conform to the “equal skill levels” claim.

It also advertised “Play real people, NO BOTS, guaranteed!” and similar claims. However, to third-party developers, it instructed: “The bot behavior in your game must be deterministic, meaning that given the exact same set of player inputs and conditions, it must always produce the same bot behavior.”

Finally, Skillz informed its customers that they can withdraw their cash awards “at any time.” But users requesting withdrawals exceeding $5,000 must submit to a “playtest” fraud verification screening.

But none of the details mattered, because the question here was injury. The parties were direct competitors. But without comparative advertising, that wasn’t enough to presume injury. Papaya’s 30(b)(6) witness stated that “[b]ased on my experience, advertisements highlighting the ability to withdraw money easily and quickly are highly effective” and that “Skillz’s statements about withdrawals on its platform” “are likely to and do cause harm to Papaya.” Its damages expert did not opine on harm causation.

This was not enough to avoid summary judgment on injury.

Papaya’s market share in 2021 grew astronomically, while Skillz’s market share declined…. Although there is no requirement that a party experience a decline in revenue or sales in order to suffer an injury under the Lanham Act, Papaya has failed to point to any evidence demonstrating that it suffered harm either to its sales position or to its reputation from the statements by Skillz it challenges in the counterclaim.

The claims by the Rule 30(b)(6) witness were “entirely conclusory.” Also: “The four individuals that Papaya identified during discovery as the only individuals likely to have discoverable information about any harm Papaya suffered have each invoked their Fifth Amendment right against self-incrimination.”

Papaya’s argument that the ads were comparative failed. On one webpage, headed “The Skillz Difference,” Skillz stated that it was “committed to fair competition” and that “every game is evenly matched.” That wasn’t enough to be comparative. Nor was the statement under the same header, “only real people, no unfair bots here,” or other Skillz statements that an increasing number of RMSB games “infiltrated the app stores” and used bots to defraud player, even when Skillz stated “[w]e have never and will never use bots to defraud customers, unlike our competitors.” That post linked to a news segment on bot fraud in the RMSB industry that mentions class action lawsuits against Papaya and AviaGames for their usage of bots to control the outcomes of games. But none of these made “a misleading comparison to a specific competing product.” (Seems like the last one did, but maybe one tweet just isn’t enough.) Where an injury “accrues equally to all competitors” a party must produce evidence of “actual injury and causation” to ensure that the injury is not “speculative.” Skillz never mentioned Papaya itself nor was this a two-player market.

Skillz also won summary judgment on Papaya’s unclean hands defense. While “a jury would be entitled to find that Papaya used bots to compete with human players, including to control the outcome of games, while representing in its advertising that players would be competing against other humans and could win through the exercise of skill,” Papaya didn’t show that Skillz used bots that way. “Players in Skillz’s games lost because other human players out played them, not because they were outscored by a bot.”

Pop, six, squish: do both popsicle advertisers have it coming?

Here, false advertising claims generate false advertising counterclaims, serving as a reminder that the advertiser who goes to court needs to have its own house in order.

Austin’s Natural Frozen Pops, Inc. v. Jonny Pops, LLC, 2025 WL 3182084, No. 1:24-CV-716-RP (W.D. Tex. Mar. 13, 2025)

The parties target consumers seeking “better-for-you” treat options, selling in healthy grocery stores like Whole Foods and Sprouts. JonnyPops’ boxes show pictures of fruit, and JonnyPops advertises that its products are made from “simple ingredients,” are made with ingredients like “100% real fruit,” and have the “wholesome nutrition of a fruit bar.” JonnyPops also displays the “USDA Organic” label prominently on its packaging.

JonnyPops boxes

GoodPop alleged that this violated California law and the Lanham Act because the two main ingredients in JonnyPops’s pops are water and added cane sugar, and any fruit in the products is only miniscule amounts. And,despite displaying lemons, limes, blue raspberries, and grapes on the packaging for JonnyPops’s “Fruit Stacks” treats, the product allegedly contains none of those fruits. GoodPop’s survey of household grocery shoppers aged 18 to 65 years allegedly found that 50% of respondents believed JonnyPops’s “Fruit Stacks” treat was made primarily out of fruit, while the treat allegedly contains less than 2% fruit content. Likewise, JonnyPops’s advertising allegedly led 61% of respondents to believe that the majority of the sugar in the product came from fruit. GoodPop’s complaint also cited customer reviews that praise JonnyPops’s pops for being a healthier option and having relatively low sugar, and alleged deception among retailers as well.

GoodPop alleged that JonnyPops models its mission, brand positioning, and pops after GoodPop’s. While GoodPop uses Good in its name to refer not only to the ingredients in its products, “but also its desire to inspire a ‘World of Good,’” JonnyPops advertises its mission to be “Make the World A Better Place, One Pop At A Time.” JonnyPops allegedly uses “nearly identical flavors” and similar package design and claims. [In the absence of a trade dress claim—and flavors are surely functional for ice pops—how could that matter?]

JonnyPops boxes with same flavors as Goodpop boxes

First, JonnyPops argued that the images of fruit do not mislead consumers when viewed in context of the entire package, because the fruit images indicate flavors, rather than ingredients, especially in combination with the ingredients list on the side or back of the package. But “the mere presence of an ingredient statement on the back of the product ‘does not eliminate the possibility that reasonable consumers may be misled.’” Misleadingness was plausible. Nor were the pictures and the “simple ingredient” claim non-actionable puffery. The statements at issue here, especially the pictures, weren’t exaggerated in the way typically associated with non-actionable puffery: words like “best,” “better,” and “favorite.” Even if “simple” may be subjective, it was the phrase “simple ingredients” in combination with the fruit pictures and the rest of JonnyPops’s advertising that allegedly misled consumers; that context made the claim plausibly misleading.

Deception was plausible based on the survey as well as consumer reviews, along with allegations that “a nutritionist with more than 1 million followers on social media” recommended JonnyPops over another pop that contained less sugar, mistakenly believing that it was JonnyPops’s pop that had less sugar.

The consumer reviews also plausibly showed materiality. E.g., consumers believed and cared about claims that the pops have “a lower sugar content and appear[] to be a better for you[] product tha[n] your typical pop” and are “made of all natural ingredients and had good nutrition compared to a lot of sugar brands.”

And injury was plausible because of the direct competition, and because of allegations that, “where retailers have limited space to stock either GoodPop or JonnyPops in their better-for-you section, retailers have chosen JonnyPops due to its deceptive sales presentations, because JonnyPops is not truly a better-for-you product.” For example, “when JonnyPops began selling next to GoodPop as a better-for-you product in one health grocer, GoodPops’s sales velocity declined by about 25%.”

The state law claims survived for the same reason; it was ok to assert California claims in Texas because the alleged wrongful conduct occurred in California.

Austin’s Natural Frozen Pops, Inc. v. Jonny Pops, LLC, 2025 WL 3182084, No. 1:24-CV-716-RP (W.D. Tex. Nov. 10, 2025)

The parties compete in the market for “ice pops.” GoodPop sued JonnyPops under the Lanham Act and also for violations of California’s unfair competition law. JonnyPops counterclaimed under the same laws, alleging that GoodPop has “duped consumers into thinking that its products are nutritionally superior to other ice pops, including JonnyPops’s products.” The court refused to dismiss some of the counterclaims.

GoodPop allegedly falsely claimed that “[i]f it’s a GoodPop, it’ll never have ... refined sugars,” even though many of its products “contain cane sugar, which is always refined to some extent,” citing definitions of “raw sugar,” “sugar,” and “cane sugar.” It alleged that four consumer reviews showed consumer belief and reliance. The court found that, at this stage, it would accept the claim that cane sugar is refined sugar. Thus, JonnyPops had alleged actual falsity and didn’t have to provide separate evidence of deception/materiality; in the alternative, three of the alleged online reviews “specifically refer to GoodPop’s products not containing refined sugar, which make it plausible that GoodPop’s alleged deception is material.”

refined sugar claim on box

Second, JonnyPops alleged that GoodPop’s website makes the false or misleading statement, “The fruit in GoodPops is real and really good! We use real, whole fruits, juices and purees” when (1) certain GoodPops do not contain any fruit, and (2) some GoodPops that do contain fruit ingredients are made with fruit-juice concentrates and other additives, rather than “whole fruit, juices or purees.” It quoted seven online consumer reviews that mention GoodPops containing 100% fruit juice.

Cherry n' Lemonade flavor

First, it wasn’t plausible that consumers would be deceived by SKUs whose names didn’t claim fruit: the Disney Mickey Mouse Fudge n’ Vanilla Pop, the Fudge n’ Vanilla Crunch Pop, the Fudge n’ Caramel Crunch Pop, and the Chocolate Vanilla Sandwiches. However, GoodPop’s Cherry n’ Lemonade Pop and Star Wars Green Apple Lightsaber Pops allegedly “consist largely of fruit-juice concentrates and other additives, rather than whole fruit, juices, or purees.” Aaccepting as true JonnyPops’s allegation that fruit juice concentrate is not a type of whole fruit, juice, or puree, that was enough to plead literal falsity; several cited reviews positively reference GoodPop’s Cherry n’ Lemonade Pop being made with “100% real juice.”

Third, JonnyPops alleged that GoodPop uses images of children eating its most sugary products to give consumers the misleading impression that its products are healthy for children. No dice. None of the alleged online reviews or comments were tied in any way to images of children in its advertising.

Fourth, JonnyPops alleged that GoodPop’s packaging of its products is “misleading and deceptive because [it] displays images of fruit that are not the exclusive or even the primary ingredients of its products.” For example, GoodPop’s Cherry n’ Lemonade Pop allegedly contains filtered water, white grape juice concentrate, and apple juice concentrate as the top three ingredients, as well as “some lemon juice” and “cherry ... concentrate” as lesser-included ingredient. JonnyPops cited a review that states, “I love the mixture of the sweet tangy flavors from the lemon and cherry juice” and another stating “You can taste the lemon and cherry in them.” [I’m reminded of research indicating that vanilla ice cream tinted pink is perceived by many consumers as strawberry-flavored.] Whether consumers instead understand the packaging to show “critical ingredient[s]” was a fact issue to be resolved after discovery—just as in the Pom Wonderful case.

The court found that it was plausible that consumers believe GoodPop products only or primarily contain the fruit(s) depicted on the packaging, thus making the packaging misleading for products where the fruits in question are not the only or primary ingredient. However, “JonnyPops’s argument that GoodPop’s packaging displays images of whole fruit but does not contain whole fruit is borderline frivolous. As GoodPop argues in its Reply, ‘no customer who sees whole cherries or oranges on a package expects to find stems and peel in the product.’”

The court likewise denied the motion to dismiss counterclaims based on product names. “It is plausible, for example, that consumers are misled by a product being called Cherry n’ Lemonade Pop, when the product contains more grape-based and apple-based ingredients than cherry-based or lemon-based ingredients.”

Finally, JonnyPops alleged that GoodPop’s use of the “USDA Organic” symbol on its packaging misleads consumers into believing its products are healthy. A review of GoodPop’s Orange n’ Cream Pop, which contains eight grams of added sugar stated that the reviewer felt “particularly good about [this popsicle] because it is made of organic ingredients, no refined sugar or high fructose corn syrup, and no artificial dyes.” Another consumer reported that they “love the fact that these pops are organic, dairy free and isn’t loaded with sugars and calories. Taste like the normal thing but way healthier.”

Although I would have gone with preemption, the court found that this wasn’t plausibly misleading. “JonnyPops does not provide the Court with any facts supporting that GoodPops being labelled organic makes consumers think anything other than what the label says—that they are organic…. If JonnyPops’s argument is that a product can be both organic and unhealthy, which is misleading to consumers, then that is an issue inherent with the USDA’s definition of organic— not an issue with GoodPop’s particular use of the ‘USDA Organic’ label.”

The California claims failed because JonnyPops didn’t plead facts allowing the court to draw the reasonable inference that GoodPop engaged in wrongful conduct in California or made false or misleading statements there.

Chicken feed virus protection claim triggers lawsuit

 Kalmbach Feeds, Inc. v. Purina Animal Nutrition, LLC, 2025 WL 3153412, No. 2:25-cv-00617 (S.D. Ohio Nov. 12, 2025)

One reason I love advertising law is that, eventually, everything lands in it, and I learn about new-to-me corners of the world. Kalmbach sued its competitor Purina for statements about Purina’s poultry feed products under the Lanham Act and the Ohio Deceptive Trade Practices Act, and secured a preliminary injunction on some of its claim.

Kalmbach’s “Henhouse Reserve” is aimed at the “backyard” poultry market, as is Purina’s “Farm to Flock.” They are both granola-like “premium” feeds aimed at owners who keep egg-laying hens. “Backyard chicken flock owners tend to have fewer chickens; they may treat their chickens more like pets and pay for premium feed. … Backyard owners may also be more emotionally motivated to keep their chickens alive, because they might keep their chickens as a hobby, for eco-conscious reasons, or because they view them as their pets. Thus, they may be particularly concerned about recent avian influenza outbreaks.”

Farm to Flock contains “FeedLock,” a “multispecies feed additive technology” consisting of medium-chain fatty acids which are designed to interact with the membranes of envelope viruses and “deactivate” them. “Although medium-chain fatty acids have been found to help prevent outbreaks of disease in swine, to date, there is no evidence that they impact disease outbreaks in poultry.”

Nonetheless, for a month and a half in 2025, Purina actively marketed Farm to Flock as “helping to defend against bird flu.” It based this claim on (1) a lab test and (2) an assumption. For (1), Purina and its codeveloper dosed four samples of chicken feed with varying levels of FeedLock and H5N1, and one sample of control feed with H5N1 only. The FeedLock feed “showed reduced viral loads” after twelve hours, while the control sample showed stable levels of bird flu for a week. For (2), based on the “consensus in the swine industry,” stemming from a commercial swine study, that medium-chain fatty acids “inhibited the transmission of [swine envelope virus] pathogens in the feed to” swine, Purina extrapolated that the medium-chain fatty acids in FeedLock would similarly inhibit the transmission of the avian influenza envelope virus pathogens to poultry.

Purina directly advertised its Farm to Flock bird flu defense claims on its website and social media platforms, as well as through direct communications to consumers and distributors across the United States. Its employees, including scientists and sales representatives, repeated variations of these claims on webinars and at in-person industry meetings. In describing the purported flu-fighting properties of Farm to Flock, Purina’s employees sometimes claimed it “has been shown to be protective against, protecting against viruses...includ[ing] bird flu.”

one example of the virus defense claims; more below

Regulators in Kansas and Minnesota quickly raised concerns, to which Purina responded by removing its claims and requesting that similar claims made by third parties be taken down. The FDA subsequently identified an additional statement that Purina needed to edit or remove, which it did. But Kalmbach, believing it had already suffered damage, brought suit.

The court considered the state and federal claims to have identical standards.

Purina argued that claims like “helps defend against bird flu” referred to defending the feed from becoming a transmission mechanism for bird flu, not to defending the birds against bird flu. The court didn’t find that a plausible reading. Anyway, such claims were “scientifically dubious,” given that chicken feed was not known to be a transmission vehicle in the first place; swine feed can be a source of transmission for viruses in swine, but those swine viruses don’t affect birds. Its lab test didn’t show a decreased risk of chickens contracting bird flu. Thus, the court found that the statements about the impact of FeedLock feed on avian influenza were likely to be found literally false.

Purina’s “immunity” statements were also literally false. Not only did Purina tout its feed’s “Complete...Defense for Laying Hens” and “Fun-filled, flu-fighting goodness” in large font at the top of the advertisement, with the supposed caveat explaining that this defense relates to the feed in small font at the bottom, even the caveat was false: “FeedLock® is a breakthrough ingredient of the system that nourishes and protects, helping to instantly defend your flock against avian influenza, while also boosting immunity and breaking down harmful pathogens on the feed with every bite.” This reference to “immunity” indicated that Purina was making claims both about FeedLock’s interaction with avian influenza on feed, where FeedLock supposedly would break down pathogens, and about avian influenza in a bird, where FeedLock would supposedly boost immunity. Purina’s own expert witness testified that it was “improper” to represent that FeedLock provides any “immunity or treatment against avian influenza.”

ad claiming to support "immune, digestive & overall health"

And, given the expert consensus that feed is not recognized as a “transmission vector of bird flu,” Purina’s “more ambitious” statements that FeedLock defends against the bird flu, apart from any immunogenic function, were also literally false. “If feed is not a known transmission vector—and Purina’s laboratory test does not show that it is—protecting the feed could have no impact on whether birds would get avian influenza.” At most, Purina’s expert would only say that “[FeedLock] would definitely be able to interact with that virus and break down the viral envelope,” which would then reduce the infectivity of the virus to some extent—but she would not say that it could “neutralize” the virus. Even in the lab, infected feed was only “approaching nondetectable or approaching noninfective” once treated with FeedLock (emphasis added). “Purina had no evidence showing Purina feed infected with avian influenza, once treated with FeedLock, ever had a nondetectable or noninfective amount of avian influenza.” And the feed tested in the lab was poultry mash feed— “a ground feed different than Farm to Flock.” [Some parts of this sound like “lack of substantiation” arguments, something that shows up later in the remedy discussion, though taken together they plausibly add up to literal falsity. In addition, given the scientific nature of the claims, it is reasonable to treat them as “tests prove” claims, which means that they can be falsified by showing that the tests don’t prove the ad claim.]

social media post

In addition, Purina necessarily implied false statements about “defense against” bird flu.  E.g., claims that FeedLock “helps defend your flock....It helps to support strong healthy hens by actively supporting and fortifying immunity and gut health” had to be read in context with Purina’s claim in that same ad that “FeedLock®...helps defend your flock against avian influenza and other viruses” and claims that the feed “give[s] your hens the wellness boost they deserve with layer feed that nourishes AND defends: [f]ortifies immunity and helps defend against bird flu[,] [g]ut health support[,] [s]trong shells, vibrant yolks.” These claims necessarily implied that the feed would defend the chicken against bird flu after consumption, and that the feed gives the hens a wellness boost.

“Every other claim in the ad (that the feed nourishes, fortifies immunity, supports gut health, leads to stronger shells and vibrant yolks) suggests a benefit to the hen, not the feed.” Thus, even assuming the bird flu defense claim could technically/linguistically be about the feed, it was false by necessary implication. “Purina cannot be heard to claim that this one statement, buried among six about how Purina feed benefits the health of hens, is about a benefit to the feed itself. It cannot be heard to say that any claim that its feed fortifies immunity is unrelated to a claim that the feed defends against viruses.” Purina’s proposed truthful meaning was not reasonable and thus the claim could not be called ambiguous.  The court noted that other ads suggest that the more FeedLock feed a bird consumes, the stronger its immunity becomes: “FeedLock®...help[s] to instantly defend your flock against avian influenza, while also boosting immunity...with every bite.”

“[S]ome of these ads plainly and facially imply that FeedLock feed is defending or mitigating avian influenza in the chickens themselves by ‘boosting immunity.’” Letters and inquiries from Purina’s regulators confirm this implication.” (Among other things, the FDA took issue with advertising statements about the bird flu that lacked “explicit reference to the feed itself.”)

another ad

The ads also necessarily implied that FeedLock defended backyard chickens more when more feed is consumed, and continued to defend chickens even after consumption—by offering continuing immunogenic and health benefits to the birds “with every bite.” The combination of immunity and health claims along with claims that FeedLock feed “defends against” avian influenza and other viruses “necessarily implies that FeedLock is providing some antiviral value to the bird itself, including after consumption. Based on the record, this appears to be false.”

So too with the necessary implication of statements claiming benefits against “other viruses.” “Viruses,” plural, “necessarily and unambiguously implies, in the context of an advertisement for ‘Hen Food,’ that there are other viruses that FeedLock defends against.” Again, the record supported falsity. “Avian influenza is the only virus known to infect birds.”

fact sheet (or is it?) claiming to fight "viruses like" bird flu

The court didn’t bother with misleadingness (though some evidence shows up in the materiality discussion), because literal falsity can be presumed deceptive. There was direct and indirect evidence of materiality: direct from customer inquiries, which can show that a claim was purchase-relevant, and indirect. “One of Kalmbach’s sales representatives testified that she was told by customers and potential customers that they wouldn’t consider Kalmbach’s Henhouse Reserve feed because it lacked a bird flu preventative or bird flu prevention, unlike Purina’s Farm to Flock.” (Not hearsay because not offered for the truth of the matter asserted.) Plus, Kalmbach showed that Purina “misrepresented an inherent quality or characteristic of the product.” Advertising virus defense is likely to induce consumers to believe they are getting a better product than feed that does not offer such a defense. Purina’s own internal consumer research results concluded that such claims were “most motivating” to customers; Kalmbach’s expert testified that many consumers in this market “are more emotionally motivated to keep their chickens alive, and are concerned by recent outbreaks of avian influenza,” and Purina’s expert agreed that backyard owners “are emotionally connected to their flock.” Purina’s senior marketing manager testified that Purina’s consumers “started to humanize or personify their chickens, and so they treated them like family. They were more like pets like cats and dogs.” [I hate to ask, but, based on this story, I have to wonder: is MAGA going to go after antivirals in chicken feed? Will they worry about chicken autism?]

another example

The court pointed specifically to a Purina internal report finding that the vast majority of consumers in the market found “brands that spend time educating customers are more trustworthy,” [of relevance far beyond this case!] and thought it was “important to stay up to date on the latest nutrition for animals.” It did not follow that consumers would be skeptical of such claims: “If anything, it seems logical that consumers would be less inclined to scrutinize Purina’s claims because they would trust Purina, believing that Purina’s efforts to educate consumers as to their feed’s purported benefits were based on the latest updates in animal nutrition.” And Kalmbach’s sales rep supported this by testifying that she told a potential customer that the claim wasn’t true, and received the question: why would Purina advertise it if it wasn’t true?

Causation/harm: “[T]o obtain injunctive relief[,] logical likelihood of damages is sufficient.” Given the presumption of deception and the existence of some evidence of misleadingness, including a consumer inquiry into why Kalmbach does not “have a product like [Purina’s] that can defend against bird flu,” Kalmbach was a likely victim of Purina’s acts.

There was a presumption of irreparable injury. Purina argued that the presumption was rebutted here because any lost sales could be recouped by money damages, and there was no evidence supporting “a more severe and ongoing injury,” like a dealer dropping Kalmbach for Purina or reputational damage. It also argued that requiring it to contact its customers would be too extreme here, where there is no ongoing, irreparable injury.

Characterizing the issue as one of “presumption of harm,” rather than presumption of irreparable injury, the court found that there was still the distinct possibility that Kalmbach will suffer injury, which is the wrong question, but the right one probably still has the same answer. That’s because,

although Purina sent out three blast emails to 130,000 recipients about Farm to Flock with statements regarding avian influenza, it has never corrected those emails. Should any of those 130,000 email recipients (or any further recipients of those emails) rely on those emails, further disseminate those emails, or refer back to those emails today or in the future, they may believe Purina still represents that its Farm to Flock feed helps defend against bird flu. Because it would be difficult, if not impossible, to calculate whether Purina’s more recent sales of Farm to Flock were a result of these latent advertisements, calculating damages would be futile.

Purina argued that Kalmbach’s supposed delay in bringing the motion undermined any claim of irreparable harm. Kalmbach learned about Purina’s advertisements in April and sued in early June; that wasn’t a sufficient delay to undermine Kalmbach’s claim of irreparable injury, especially given that Kalmbach would need some time to evaluate the scientific claims.

Harm to Purina/balance of equities: Purina stopped further publication but didn’t issue corrective statements. Purina argued that a public retraction would risk damaging its reputation. At the preliminary injunction stage, a court order proclaiming its ads were “unsupported and untrue” would erode brand trust and goodwill, so that would be inappropriate. To be sure, this was something of “a self-imposed risk” to Purina, so the court tailored the injunction to avoid some of Kalmbach’s proposed harshness.

Purina initially consented to a mostly prohibitory preliminary injunction: stop the accused advertising and notify distributors, retailers, and marketing affiliates to cease use and dissemination of that advertising. Kalmbach wanted Purina to publish a statement saying its claims were untrue and that it was retracting them.

“Purina’s argument is mainly that requiring any public statement on Purina’s part would be too extreme, and Purina points to cases where courts ordered much more tailored relief.” The lesson was that “retractions should be issued in instances where identifiable third parties received the challenged claim,” and here those were emails. “Just because Purina has addressed some forms of its prior advertisements does not mean that all confusion will have dissipated. Thus, Purina must issue some form of a retraction.”

But the court would limit the language. The antivirus claim was false “for the purposes of the Lanham Act and the Ohio Deceptive Trade Practices Act because Purina had no empirical support or basis for it, and the scientific consensus today suggests that it is incorrect.” But Kalmbach’s expert testified that it is possible that avian influenza could live on chicken feed, and that if a bird ingested that infected feed, that bird could get avian influenza. And it was an open question whether FeedLock would have any effect on avian influenza in bird feed, or the population of birds that eat that feed. [It’s possible that sprinkling a mix of cinnamon and cumin into the feed would protect birds; this is why the Third Circuit held that making unsubstantiated claims that you have no reason to think are true counts as making literally false claims. It’s bullshit in the sense that you have no interest in the truth value of your claim; you’re just making it to sell the product. And that’s not an attitude towards truth worth protecting even if “lack of substantiation” claims are otherwise unavailable.]

But, anyway, this was a preliminary injunction and not a final determination of falsity, so the court required the retraction (to be sent to email recipients and posted on Purina’s website) to say “At the preliminary injunction stage, the Court found that Purina engaged in false advertising because these statements were not scientifically grounded and lacked a scientific basis. Purina retracts these statements, as well as any other representation that Purina’s Farm to Flock 18% Layer Hen Food defends against, protects against, prevents, mitigates, or provides immunity to the effects of avian influenza, bird flu, or other viruses.” [Quick TOS question: does your TOS warn people who unsubscribe from your mailing list that you might have to contact them in the future for legal compliance?] [Quick reading comprehension question: what percentage of consumers will consider the reputational hit to Purina decreased because it’s just a preliminary injunction? I think the court did the right thing, but that doing so will not change the effects on Purina’s overall reputation one jot. Which is to say that sometimes we should be happily normative about these issues.]

Note: the court specified URLs at which the notice should be given, and they’re not there yet, but Purina has 10 days, which (as of Nov. 14) have not yet passed. 

Landing page that misdirected searchers away from real senior living community was plausibly false advertising

Cedar Communities at Commerce, LLC v. Caring, LLC, 2025 WL 3187288, No. 1:25-CV-00922-JPB (N.D. Ga. Nov. 14, 2025)

Caring operates a web-based senior living placement and referral service, touting “the longest-running, highest-integrity senior living review program on the web, all to ensure families make the best and most informed choice possible for their loved ones.” Caring claims that it offers “free, personalized guidance from experienced advisors who understand the unique needs of seniors and their families” and that “Family Advisors provide invaluable expertise to ensure you have all the information you need to successfully find the community that meets all of your needs.”

Cedar argued that these statements were false and misleading because (1) Caring exclusively refers potential customers to senior living communities that are in its referral network, for which it earns commissions, and (2) the service is not free, because Caring’s commissions are equivalent to the first month’s rent and care and these costs are passed on to the customer through higher rent and care expenses.

Cedar isn’t part of Caring’s referral network, but when someone searches for “Brookside Commerce” (its dba) a “prominent listing” for that appears on Caring’s site because of Caring’s SEO.

Google result

Cedar argued that this falsely implied that its facility was part of Caring’s network; that the included photo is fake; and that the 3.3-star rating is phony. If a potential customer clicked on this link, they’d go to a landing page tailored for Brookside Commerce, furthering the illusion of network membership.

landing page

A click on “Request Tour,” “Get Costs” or “Find Availability” would be connected to one of Caring’s representatives—not one of Cedar’s representatives—who then directs the inquiry away from Cedar’s facility and to a community within its referral network.

Cedar filed a putative class action for violation of the Lanham Act and coordinate state law. The court declined to dismiss, saying some things about false association that are worrying devoid of context but understandable on these facts, and they are properly framed as false advertising claims—requiring materiality (and commercial advertising).

Caring argued that claims like “comprehensive directories,” “expert consultation” and “free referrals” were either non-actionable “puffery” or true, and that Caring does not purport to offer “unbiased” consultations and openly discloses its commission-based referral network model on the website.

Even without a specific statement about lack of bias, “after viewing the statements as a whole and considering the full context of the statements, the Court finds it plausible that a reasonable consumer under some circumstances would be misled into believing that Defendant’s representatives generate their recommendations in an independent, fact-based manner and select possible options from the entire directory—instead of only promoting communities in their network.”

What about the stock photo and user reviews?  Not really addressing those, the court agreed that the landing page “creates a false impression of affiliation with” Cedar. Here’s the yikes: “As an initial matter, it is reasonable to assume that some people would think that Plaintiff’s facility was part of Defendant’s network simply because the landing page exists on Defendant’s website.” More persuasively, “the option to request a tour, get costs or find availability … give the false impression to potential customers that they have the ability to easily obtain additional information about Plaintiff’s facility by just clicking a button. Importantly, however, when potential customers click on one of those buttons, the potential customer is never provided with more information about Plaintiff’s facility and is instead transferred to one of Defendant’s representatives that recommends a facility that pays commissions to Defendant.” (Note that if the buttons did work as labeled, even without affiliation, there wouldn’t be falsity.)

Materiality: Cedar alleged that choosing a facility is a “complex process” and that families and caregivers “often face overwhelming stress and anxiety when trying to choose the right senior care option for their loved one.” It was plausible that the website misrepresented “the inherent qualities and characteristics of Plaintiff’s facility,” and Caring’s claim that it offers expert recommendations “enhances the likelihood that [the] misrepresentation would influence purchasing decisions” of potential customers, especially where the decision making is complex and stressful.

Injury: Given the diversion from Cedar if consumers clicked buttons requesting a tour, etc., that was plausibly pled, even without identifying specific diverted consumers. Reputational injury was also plausible because consumers may falsely assume that Caring’s alternative recommendations (other assisted-living facilities) are superior.

State-law claims: Cedar argued that Caring’s keyword “manipulation” violated state law against unfair business practices, and so did the “unauthorized” landing page, leading consumers to believe the parties were affiliated. Again, the court allowed the claims—even though keyword advertising on its own is benign.

Fiskars can't cut down $1.4 million disgorgement award

Fiskars Finland OY AB v. Woodland Tools Inc., 2025 WL 3124111, No. 22-cv-540-jdp (W.D. Wisc. Nov. 7, 2025)

Previously in this false advertising case the court sent to a jury part of Woodland’s claim against Fiskars for false advertising, based on Fiskars’s statements about the cutting power of its tools, and some of its statements that certain products were designed in the United States. The jury sided with Woodland and the court ordered disgorgement of about $1.4 million of Fiskars’s profits. Here, the court denies JMOL to Fiskars as well as Woodland’s requests for attorneys’ fees and prejudgment interest.

Fiskars argued that Woodland showed no evidence of harm, such as diverted sales. There was no evidence of any specific lost sale, but Woodland wasn’t required to present such evidence to get the equitable remedies of injunction and disgorgement, only a likelihood of future injury. “The likelihood of future injury is readily shown when the parties are direct competitors and the false statement implicates the plaintiff’s product.” Here, the evidence showed that the parties’ tools appearing side-by-side on the shelves of some retailers. And 14.5% of Woodland’s survey respondents construed Fiskars’s “3X More Power” claim to be a comparison to competitive products, while Fiskar’s own expert testified that 43.9% of survey respondents considered Fiskars’ cutting power claims in making their purchases. A reasonable jury could find likely future harm.

As for the design origin claims, they were unambiguously false. One of Fiskars’s witnesses testified that the design origin claims didn’t resonate with consumers. But they were at least implicitly comparative, and Fiskar’s survey found that 37.1% of survey respondents considered the design origin claim in making their purchase of Fiskars tools. A reasonable jury could also find likely future harm here.

Fiskars argued that the quantified cutting power claims weren’t actionable statements of fact because they had no ascertainable meaning. Even if this argument weren’t waived, the verdict was supported by substantial evidence. A claim that Fiskars’s cutting tools were “powerful” might be unquantifiable puffery, but “more power” implies a comparison with something else. “That comparison could be tested and confirmed or disproven, even if the claim is ambiguous because the object of the comparison isn’t stated.” “More power” wasn’t “a completely vacuous or inherently subjective claim like ‘better,’ or even the resolutely ambiguous ‘local.’” And adding the quantifier “3X more power” “suggests an even more specific comparison that has somehow been measured or calculated.” People didn’t have to know exactly how to believe it.

The survey evidence “showed that a substantial number of respondents took the cutting power claims to mean three times more power in comparison to competitive products.” But this wasn’t true. Fiskars’ evidence showed that the original comparison was between Fiskars’s mechanically advantaged tools and single-pivot tools. Although the claim was ambiguous, a significant number of prospective purchases interpreted the cutting power claims to be a reference to competitive products, and that interpretation was false.

 

Fiskars argued that Woodlands didn’t test enough different products to show that the claims were false as to all. But given the origin of the claim in a comparison with single-pivot tools, there was no reason to think that Fiskars could support the claim that its tools were better than mechanically advantaged tools. (This is perhaps an understandable instance of burden-shifting, at least with respect to the burden of production, or an adoption of the Third Circuit rule that making a claim that you have literally no reason to think is true constitutes falsity.)

Materiality: Although one Fiskars witness testified that neither the cutting power claims nor the design origin claims resonated with consumers, there was “ample testimony” that Fiskars invested a lot in touting its cutting power claims. A retailer requested “aisle violators” promoting the 3X claims, suggesting that it regarded the cutting power claims as important. Woodland employees, who used to be Fiskars employees, testified about the importance of the claims; the jury could have found them to be biased, but it didn’t have to. And Fiskar’s survey could also be used to show materiality: 43.9% and 37.1% were “alone” enough to suggest materiality.

Fiskars’ survey also asked respondents what factors were important to the purchasing decision, asking them to allocate 100 points among them. Cutting power scored an average of 7.7 points; design origin scored an average of 5.5 points. Fiskars argued that these scores were too low to find materiality, but “manufacturer or brand name” was the factor ranked third highest among the nine options, and it only scored an average of only 10.1. Although other factors accounted for an average of 86.8 points, the expert didn’t testify that cutting power or design origin were irrelevant, and the jury could weigh the survey in Woodland’s favor.

Still, this wasn’t an exceptional case, just a thoroughly litigated one; no fees (or prejudgment interest). On the patent claims, Woodland argued that Fiskars made little effort to investigate its claims and brought this case as an illegitimate effort to quash legitimate competition, promising to go after Woodland Tools with “scorched earth” tactics using the world’s largest law firm. “The case had a David and Goliath feel to it, due mainly to the relative size of the parties. And there’s no doubt that Fiskars pursued the case aggressively.”

Still, the court found Fiskars’s outrage “understandable” because Woodland Tools was founded by former Fiskars employees, and there was some evidence that “some of those employees were laying the groundwork for the new competitor while they were still working for Fiskars. Some of the employees left with Fiskars work product and software code.” Although Woodland prevailed on these claims at summary judgment, “that doesn’t mean that the actions of Woodland Tools employees were unimpeachable, or that Fiskars pursued legal action out of pure spite. Part of Fiskars’s goal was to impede competition from Woodland Tools, but that’s an ordinary and lawful purpose of litigation over trade secrets and intellectual property.”

The court didn’t award Lanham Act fees because it assessed reasonableness in the overall context of this case, which featured multiple claims.  Woodland’s “success in showing willful false advertising based on the 12 cutting power claims and one of the design origin claims [was] a small part of a much larger case.” And, though Fiskar’s false advertising was willful, it wasn’t particularly egregious. The cutting power claims weren’t literally false, and only a minority of survey respondents interpreted them as a comparison to competing products or found them material. Nor was Fiskars’s litigation conduct exceptional.

Prejudgment interest: Under the Lanham Act, there is a presumption that “victims of violations of federal law” are awarded prejudgment interest, but the decision is ultimately committed to the discretion of the court. The court would have awarded prejudgment interest for damages reflecting the time value of the money, but not for disgorgement in the absence of actual damages. Prejudgment interest would be a penalty, not compensation.

Star Wars mod wars: claims over a touted but unreleased mod have to go to trial

Mickelonis v. Aspyr Media, No. 8:23-cv-01220-MWC-ADS, 2025 WL 3050071 (C.D. Cal. Oct. 2, 2025)

Interesting video game related dispute: Aspyr develops video games, including by recreating and re-releasing historic games on modern platforms like Steam and Nintendo Switch. Aspyr has a longstanding relationship with Lucasfilm to release historic Star Wars games, including Knight of the Old Republic II: The Sith Lords (KOTOR II). Players adopt the personal of a Star Wars character and guide that player through a storyline.

Many games allow players to add their own content, including maps, designs, and other features. Gameplayers also release new, unofficial content, called “mods” or “downloadable content.” “The game studios that release these games are not the designers of these mods, and the mods often have gameplay or other issues.” Years after KOTOR II’s 2004 release on Xbox, a group of modders discovered previously unreleased code in the game itself and created the mod at issue here; the group included programmers, fans who supplied new voice-overs, and others. Aspyr characterized the mod as involving “a few new characters and an alternate ending,” while plaintiffs argued that the mod had “a significant amount of unreleased and unfinished content,” which the modders “unlock[ed], fill[ed] out, debug[ged], and complete[d] ... ,” including “expanded locations, new dialogue and voices, new character interactions, and even a new planet.”

Aspyr re-released KOTOR II for Steam, Nintendo Switch, Xbox, and others in 2017. When re-releasing KOTOR II for Steam, Aspyr negotiated with the developers of the Mod for them to release the Mod at the same time; the Mod would be free on Steam, just as it had been when the developers released it in the early 2000s. Aspyr also contacted the modders, who signed a formal release on behalf of the developer group, for free release on the Switch. The parties disagree on what happened next.

Aspyr’s Star Wars games historically cost between $9 and $15 to consumers. As for marketing,

 Many of KOTOR II’s users are drawn to the game because of Star Wars, rather than a general interest in video games. Accordingly, when marketing to those consumers, Defendant focused on emphasizing the Star Wars theme and the Lucasfilm logo. Other users were more focused on KOTOR II’s game type—a first-person, choose-your-own-adventure story, and the bulk of Defendant’s advertising focused on these users. That advertising included a YouTube video showing actual gameplay and describing the game’s story.

One of its YouTube videos had, in the final four seconds, an announcement reading “Coming Soon: Restored Content DLC.” Nintendo posted the same trailer on its e-shop for KOTOR II where consumers would purchase the game. Aspyr tweeted about the Mod and referred to it publicly multiple times. It released a version of KOTOR II for Nintendo Switch while the release of the Mod was still pending. And then, as the existence of this litigation signals, it didn’t release the Mod, apparently because Lucasfilm got cold feet/wanted releases from people who weren’t findable. During the attempt to reach agreement, a higher-up told people that “all marketing activity should be paused,” but the marketing team did not remove several ads, including the YouTube video announcing the release and various tweets.

Thus, in June 2023, Aspyr announced that it couldn’t release the Mod and offered a free game to maintain customer loyalty. It sold 160,000 copies of KOTOR II worldwide.

Plaintiffs provided evidence that some consumers were motivated by the Mod, e.g., “They knew no one would buy it without the [Mod]” and “Restored Content DLC? That’s really good, more than what I expected... Serious?! Even the current Xbox version doesn’t have it. I might need to buy it... If that’s true it’s a must buy to me,” and then “Fuck Aspyr for not offering us refunds and for straight up bait and switching us (which is illegal by the way)” and “Free game key. How about a refund guys. This was one of the key selling points of the port, a lot of people only bought it because they expected the [Mod].”

Plaintiffs submitted expert reports indicating that economic damages could be readily determined and that the Mod was likely material. Aspyr provided countervailing expert reports contesting these points. Hal Poret surveyed over 300 individuals who played KOTOR II for Nintendo Switch and found that 96.3% of respondents stated that they were satisfied with the overall purchase, while 1.7% said that they were dissatisfied, and that “[w]hen asked for all the reasons that come to mind for why respondents were satisfied or dissatisfied with their purchase of the game, 0.7% of respondents (2 out of 300) mentioned anything having to do with restored DLC.” Asking people about satisfaction with something they’ve paid for runs into significant problems of post-purchase rationalization; plaintiffs’ expert also argued that the survey “suffer[ed] from a severe validity issue, that is, it failed to measure what is supposed to measure—material impact of the ‘deceptive’ and ‘false’ advertising message about the Restored Content DLC upon relevant consumer’s intention to purchase KOTOR II,” with “an invalid measurement of materiality, an incorrect definition of universe and a major leading question.”

Although the court denied class certification under the laws of a number of states, the case continued.  

The court declined to grant Aspyr summary judgment on materiality, since a reasonable jury could reject Poret’s study. Aspyr argued that the plaintiffs were a weird, small segment of the buying public, not reasonable consumers, but plaintiffs’ own testimony plus the online comments would let a reasonable jury decide otherwise. The court noted that, “[i]n determining whether a statement is materially misleading under California law, the primary evidence ... is the advertising itself.” “Given that the last image that anyone viewing the announcement YouTube video saw were the words ‘Coming Soon: Restored Content DLC,’ and that [redacted] [ed. note: argh!], a reasonable jury viewing the advertisement could also find materiality based on its contents.” Although “materiality depends on the perspective of the consumer, not the perspective of the defendant,” the advertising itself was evidence.

Standing: Aspyr argued that, because the plaintiffs couldn’t prove that the Mod had any economic value, they lacked standing. Again, this was a contested material issue.

Injunctive relief: Aspyr argued that it had ceased marketing the Mod, but plaintiffs pointed to persisting online traces claiming that the DLC was “coming soon” on “affiliate platforms that it controls, including IGN and Gamespot.” The evidence that Aspyr controlled these sources was “limited,” but Aspyr provided no counterevidence and thus couldn’t get summary judgment.

Aspyr then argued that it lacked the requisite knowledge until March 2023, when Lucasfilm told it that Lucasfilm wouldn’t approve the release. It argued that the laws of California, Oregon, South Carolina, and Colorado required knowledge of the deception, or at least negligence (for California). For claims seeking injunctive relief under the California UCL, the court found knowledge unnecessary, while the CLRA does require knowledge (for damages). There was a genuine dispute of material fact about Aspyr’s knowledge. There was evidence that, when it started advertising, Aspyr lacked approval, and “Coming Soon” could confuse the public into believing that the game would certainly have a DLC, “when there remained a distinct possibility that the DLC would never receive approval.” A reasonable jury could conclude that the ad was knowingly false.

Oregon: “[D]efendant[’s] representations violated the [Oregon] UTPA only if, at the time that they were made, defendant[ ] knew or should have known that [its] services did not have the qualities defendant[ ] represented them to have.” There was also a genuine dispute here.

South Carolina:  The plaintiff from this state alleged that he bought the game before it was available for purchase, so the claim failed regardless of the legal standard around knowledge.

Colorado: “[a] CCPA claim will only lie if the plaintiff can show the defendant knowingly engaged in a deceptive trade practice.” Thus, Colorado’s consumer protection law “provides an absolute defense to a misrepresentation caused by negligence or honest mistake,” meaning that liability “is dependent upon knowledge or intent existing at the time of the advertising conduct and the remediable damage that results from that conduct.” Still, there was a genuine dispute of material fact.

Reliance: Plaintiffs’ declarations that they saw the marketing materials sufficed to create a genuine dispute of material fact.

Texas: Plaintiffs failed to give the required notice under Texas consumer protection law before suing.

The court also denied plaintiffs’ motion for partial summary judgment on falsity. “Viewing the evidence in the light most favorable to Defendant, Plaintiffs have not offered sufficient evidence to show that they were reasonable consumers rather than consumers with specialized knowledge.” And they didn’t satisfy their burden to prove that the statements were false when made; a reasonable jury could find that “Coming Soon” wasn’t false “based on the progress that had already been made in obtaining approvals to release the DLC, including its receipt of approval from the ‘Mod leaders.’”

Reading list: consumer protection and the industries who regularly sue their regulators

Nicholas R. Parrillo, Administrative Law as a Choice of Business Strategy: Comparing the Industries Who Have Routinely Sued Their Regulators with the Industries Who Rarely Have

George Washington Law Review, Vol. 93, No. 5, pp. 1031-1195 (2025) 

Abstract:

For some large and powerful industries, it has long been normal and even routine for businesses to sue their federal regulator. For other large and powerful industries, it has been rare for the last twenty-five to forty years or more. This variation is enormous yet almost entirely unknown to the literature on administrative law.

This Article documents and analyzes this variation in one type of federal regulation: public health and safety. For every major federal health-and-safety regulator, I search dockets to identify every judicial challenge to the agency’s actions brought by the agency’s principal regulated industry—whether by individual companies therein or by trade associations—during the period from 2013 to 2021 and, for several of the agency-industry pairings, for additional time periods extending as far back as the 1980s and as recent as 2024. The pairings covered are the following: the Food Safety and Inspection Service at the U.S. Department of Agriculture and meat and poultry processors; the Food and Drug Administration and drugmakers; the National Highway Traffic Safety Administration and automakers; the Federal Aviation Administration and airlines; the Consumer Product Safety Commission and children’s product companies; the Nuclear Regulatory Commission and nuclear plant operators; the Occupational Safety and Health Administration and employers generally; the Mine Safety and Health Administration and coal mines; the Environmental Protection Agency and power companies; the Federal Motor Carrier Safety Administration and for-hire trucking companies; and the Centers for Medicare and Medicaid Services and hospitals and nursing homes. For each pairing, I use the data on judicial challenges as the starting point for a qualitative discussion of how big or small a role litigation plays in agency-industry interaction.

I find that industry judicial challenges tend to be few and marginal when two conditions are met. The first condition is that companies in the industry have a thick relationship with the regulator—that is, each company knows the regulator will be making repeat decisions impacting its business into the indefinite future, so each company has a stake in winning the agency’s trust and goodwill. The second condition is that, with regard to the agency action at issue, industry economic interests are aligned with the mission of the regulator. This is especially the case for agency action that has the official purpose of protecting the health and safety of the industry’s own consumers, as opposed to protecting industry workers or victims of externalities of industry conduct. In protection of consumer health and safety, the industry and the regulator are more likely to view each other as on the “same team,” and industry tends to (1) see the regulator as a source of credible guarantees that help attract business, (2) fear the “bad look” with consumers that conflict with the regulator could cause, and (3) seek influence and leverage over the agency by less open and adversary means than litigation.